Huntsville gazette., 1887-12-10
PRESIDENTS MESSAGE.
The Surplus and the Tariff the Only
Questions Touched.
The Reports of Heads of Executive De-
partments and Former Messages
Referred to for Information
on Other Subjects.

transmitted to Congress to-day:
To THE CONGRESS OF THE UNITED STATES
You are confronted at the threshold of your
legislative duties, with condition of the
NATIONAL FINANCES,
Which imperatively demands immediate and
careful consideration. The amount Of money
annually exacted, through the operations of
present laws, from the industries and neces-
stiles of the people, largely exceed the suIl
necessary to meet the expenses of the Govern
ment. When we consider that the theory of
our institutions guarantees to every citizen the
full enjoyment of all the fruits of his industry
and enterprise, with only such deduction
as may be his share towards the
careful and economical maintenance
of the government which protects
him, it is plain that the exaction of more than
this is indefensible extortion, and culpable
betrayal of American fairness and justice. This
wrong inflicted upon those who bear the burden
of National taxation. like other wrongs, multi
plies brood of evil consequences. The public
treasury, which should only exist as a conduit
conveying the peoples tribute to its legitimate
objects of expenditure becomes q boarding
place for money needlessly withdrawn from
trade and the peoples use, thus Gripping our
National energies, suspending our country's
development preventing Investment in pro-
ductive enterprise, threatening financial dis
turbance, and inviting schemes of public plum
der.
This condition of our treasury is not al
together new; and it has more than once of
late been submitted to the people representa-
tives in Congress- who alone can apply
with aggravated incidents, more than ever
presaging financial convulsion and widespread
disaster twill not do to neglect this situation
because its dangers are not now palpably i'm
minent and apparent. They exist none the
less certainly, and await the unforeseen and
unexpected occasion when suddenly they will
be precpitated upon us.
On the 30th day of June 1885, the excess of
revenues over public expenditures, after com
plying with the annual requirement of the
Sinking Fund act was Sl7, $50 735. 81 during the
Near ended June 30, 1856, such excess amounted
10 o. I05, "a % and dur ng the year ended June
80, 1884, il reached the sum of $50, ,567 S495i. The
annual contributions to the sinking fund dur
ing the three years above spec fled, amounting
in the aggregate to f13S, ,O5S 32094, and deducted
from the surplus as stated, were made by call
ing in for that pnrpose outstanding three per
cent. bonds OF the Government. During the six
months prior to June 80, 1887, the sur
plus revenue had grown so large by
repeated accumulations, that it was
feared the withdrawal of this great
sum of money needed by the people, would so
affect the business Of the country that the sum
of S79 S64 100 of such surplus applied to the
payment of the principal and interest Of the
three per cent. bonds still outstanding, and
which were then payable at the option OF the
Government. The precarious condition of
financial affairs among the people still needing
relief, Immediately after the 30th day of June,
1887, the remainder of the three per cent. bonds
then outstanding, amounting with principal
and interest to tie sum of sis, ,s77. 500 were
called in and applied to the sinking fund con-
tribution for the current fiscal year. Notwith-
SLduuilS lHtS6 OptfdtlODS Ol buG treasury
Department representations of distress in busi-
ness circles not only continued, but increased,
and absolute peril seemed at hand. In these
circumstances the contribution to the sinking
fund for the current fiscal year was at once
completed by the expenditure of s27, ,6S4, ,2S3. So
in the purchase of Government bonds not yet
due, bearing four and four and a half per cent.
interest, the premium paid thereupon averag-
ing bout twenty y-four per cent for the former
and eight per cent. for the latter. In addition
to this the interest accruing during the current
r1rlnn
ness of the Government was to some extent
anticipated, and banks selected as repositories
of public money were permitted to somewhat
increase their deposits.
While the expedients thus employed. to re-
lease to the people the money lying idle in the
treasury, served TO avert immediate danger,
our surplus revenues have continued to ac-
cumulate. the excess for the present year
amounting on the first day of December to 49,,
25S, 701.19, and estimated to reach the sum of
Sll3,0J0,0OD on the 3Oth Gay OF June next az
which date 1t is expected that this sum, added
to prior accumulations will swell the surplus
in the treasury to S140.90l000.
There seems to be no assurance that with
such a withdrawal from use of the peoples
circulating medium, our business community
may not in the near future be subjected
TO the same distress which was quite lately
produced from the same cause. And while the
functions of our National Treasury should be
few and simple, and While its best condition
would be reached, believe, by its entire dis
connection with private business interests, yet
when, by perversion of its purposes, it idly
holds money uselesSly subtracted from the
channels of trade, there seems to be reason for
the claim that some legitimate means should
be devised by the Government to restore in an
emergency. without waste or extravaganza,
such money to its place among the people
If such emergency arises there
now exists clear and undoubted
executive power of relief Heretofore the
redemption of three per cent. bonds, which were
payable at the option of the Government, has
afforded means for the disbursement of the
excess of our revenue; but these bonds have
all been retired, and there are no bonds out
standing, the payment of which we have the
right to insist upon. The contribution to the
sinking fund, which furnishes the occasion for
expenditure in the purchase of bonds has been
already made for the current year, so that there
is no outlet in that direction.
In the present state of legislation the only
pTetense of any existing executive power to re-
store at this time, any part of our surplus rev.
enues to the people by its expenditure, con-
sists in the supposition that the Secretary of
the Treasury may enter the market and pur-
chase the bonds Of the Governm ent not yet due,
at rate of premium to be agreed upon.
The only provision of law from which such a
power could be derived is found in an apprOpri-
alton bill passed number of years ago; and it
is subject to the suspicion that it was intended
as temporary and limited in its application, in
stead of comforting continuing discretion and
authority. No condition ought to exist which
would justify the grant of power TO single
official. upon his judgment of its necessity, to
withhold from or release to the business of the
people, in an unusual manner, money held in
the treasury, and thus affect, at his WILL
the financial situation Of the country; and if
it is deemed wise TO lodge in the Secretary of
the Treasury the authority in the present junct
ure to purchase bonds, it should be plainly
vested and provided, as far as possible, with
such checks and limitations will define this
official right and discretion, and at the same
time relieve him of undue responsibility.
In considering the question of purchasing
bonds a means of restoring to circulation
the surplus money accommodating in the treas
ury it should be borne in mind that premiums
must of course be paid upon such purchase,
that there may be large part of these bonds
held as investments which can not be pur
chased at any price, and that com
binations among holders who are
willing to sell, may unreasonably
enhance the cost Of such bonds to the Govern
ment. II has been suggested that the present
bonded debt might be refunded at a less rate
of interest, and the difference between the old
Snd new security paid in cash. thus finding use
for the surplus in the treasury The success
of this plan, 1t is apparent. must depend upon
the voiition OF the holders of the present
bonds; and it is not entirely certain that the
inducement which must be offered them would
result IN more financial benefit to the Govern
ment than the purchase of bonds while the lat
ter proposition would reduce the principal of
the debt by actual payment. ir stead OF extend
ng it.